OBJECTIVE: The aims of the study were to determine whether Greek or Italian migrants to Australia have an elevated incidence of type 2 diabetes compared with Australian-born individuals and to what extent any differences can be explained by known risk factors. RESEARCH DESIGN AND METHODS: This was a prospective study of 34,097 men and women aged 40-69 years born in Greece, Italy, Australia, or New Zealand who were free from diabetes at baseline. For all self-reported cases of diabetes at the 4-year follow-up, a confirmation of diagnosis was sought from medical practitioners. Of these, anyone for whom there was no evidence against a diagnosis of type 2 diabetes was considered a case subject. RESULTS: Follow-up was completed by 29,331 (86%) participants, and 334 case subjects were identified. The cumulative incidence of type 2 diabetes among Greek (2.6%) and Italian (2.4%) migrants was more than three times that in Australian-born (0.7%) individuals. After adjusting for age only, the odds ratios (ORs) for being of Greek and Italian origin compared with Australian origin were 3.8 (95% CI 2.9-5.0) and 3.3 (2.6-4.3), respectively. The only known risk factor for type 2 diabetes that materially affected these ORs was BMI. After adjusting for BMI and age, the ORs for being of Greek and Italian origin, respectively, were 2.4 (1.8-3.2) and 2.0 (1.5-2.6). CONCLUSIONS: Greek and Italian migrants to Australia have a more than three times greater incidence of type 2 diabetes than Australian-born individuals, and this is only partly explained by BMI. Although weight control will remain important for these high-risk groups, identification of other risk factors is required.